Arla Foods Consolidated Annual Report 2021

42 Arla Foods Consolidated Annual Report 2021 / Performance Review / Performance overview PERFORMANCE IN INTERNATIONAL Contents III Middle East and North Africa On top of the unprecedented growth in 2020, driven by Covid-19 induced trends, we achieved 5.2 per cent volume growth in the Middle East and North Africa in 2021. However, revenue decreased to EUR 734 million, from EUR 748 million last year due to exchange rates. The branded volume growth was driven by Iraq, Kuwait and our distributor sales, while political tension in the region caused difficulties in supplying products to certain markets. Our food- service business also gained momentum after a challenging 2020, growing volumes at 44 per cent. Arla also continued to gain market shares in key markets, especially for Puck®, Kraft® and Starbucks™, proving our strong position in the market. Strategic branded volume driven revenue growth 5.2% 2020: 20.1% North America In North America, overall revenue increased by 7 per cent to EUR 289 million and branded volume growth was up by 8.3 per cent in 2021. Despite significant price increases, CastelloⓇ grew volumes by a remarkable 8.3 per cent, driven by the US and Canada. The Arla® brand continued last year's strong performance, this year with a volume growth of 10.3 per cent. Canada maintained solid growth, driven by local brand Tre Stelle, positively impacted by the continued home cooking trend. The North American branded share of sales went from 79.6 per cent in 2020 to 82.3 per cent in 2021. Strategic branded volume driven revenue growth 8.3% 2020: 7.6% Rest of the world Rest of the world, including Australia, Russia, our distributor sales and European subsidiaries, delivered volume driven growth of 8.5 per cent, and total revenue of EUR 508 million in 2021. Key drivers of the performance were LurpakⓇ, growing volumes by 8.8 per cent, and Starbucks™ growing volumes by 45.8 per cent. As Covid-19 restrictions eased, our foodservice business bounced back from the decline in 2020, however it has not yet reached pre-pandemic levels. All markets contributed to the growth, and particularly our European subsidiaries and our distributor sales experienced double-digit growth rates. Strategic branded volume driven revenue growth 8.5% 2020: 9.5% HAVARTI HAZELNUT MACCATO Arla DANO MILK Goodness T FULL CREAM 100% 200e West Africa 2021 was an exceptionally good year for West Africa, with 13.3 per cent branded volume growth and 14 per cent revenue growth. Growth was driven primarily by the Arla® Dano products, which gained significant market share in Nigeria, our main market in the region. Price increases more than offset the devaluation of the Nigerian currency. In the second half of the year, we signed a land lease agreement in Kaduna state in Nigeria and started the construc- tion of an Arla farm. Senegal continued its positive development in 2021, with 27.8 branded volume growth. Strategic branded volume driven revenue growth 13.3% 2020: -1.3% South East Asia Despite a turbulent year with lockdowns and economic challenges due to Covid-19, we grew our branded volumes by 27.1 per cent across South East Asia and achieved a significant profit improvement in 2021. Our growth was mainly driven by the strong performance of our Arla® Dano brand in Bangladesh, where we grew our volumes by an astonishing 20 per cent. In the Philippines we were able to further increase our market share and achieve 23.7 per cent branded volume growth with our strategic brands. Furthermore, our foodservice business across the region achieved 32 per cent volume driven revenue growth. We reached total revenue of EUR 180 million for 2021, forming a solid basis for continuous growth in the coming years. Strategic branded volume driven revenue growth 27.1% 2020: 9.3% China Aria أخفق و أطبخ البتر Puck Arla Baby&Me Organic Our Chinese business performed well in 2021, with 12.4 per cent branded volume, and 24.3 per cent revenue growth, reaching EUR 235 million in revenue. Growth was primarily driven by milk sales. Through our partnership with Mengniu, cheese and butter export sales also grew significantly. We successfully launched LurpakⓇ sales in a popular members-only warehouse store, Sam's club. Our early-life nutrition segment performed on a par with last year. Strategic branded volume driven revenue growth 12.4% 2020: 9.3%

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